Dependent coverage won't be free

January 17, 2011|By Tom Philpott | Military Update

Sometime this spring — an exact date has not been set — TRICARE coverage will be available to military dependents up to age 26, retroactive to Jan. 1.

But for this expansion in coverage, these young adult dependents or their parents will have to pay a premium set high enough to cover the entire cost of the program. The exact charge is not yet known but unofficial estimates have ranged from $1,400 to $2,400 a year or about $116 to $200 a month.

The bottom line is that Congress didn't achieve for military families what was gained for other families on adult dependent coverage through the Patient Protection and Affordable Care Act.

The armed services committees rejected adding young adult coverage as just another subsidized feature of the TRICARE benefit. Doing so would have added $300 million a year to the burgeoning cost of military healthcare.

In debating national health reform in 2009, opponents had argued that a superior TRICARE program should not be affected in any way. Only later was it noted that military families were left behind on the coverage of dependent children to age 26. Dependent TRICARE coverage still ended when a child turned 21 or, if attending college fulltime, at age 23.

Premiums under the TRICARE Young Adult (TYA) option are "in the process of being approved by DoD leadership," said Austin Camacho, a spokesman for the TRICARE Management Activity. "In general, the full-cost premiums will be based on the historical cost of TRICARE claims for a similarly aged cohort."

TRICARE projects a modest "take rate" the first year of 6 percent — about 14,000 young people — out of an eligible population of 233,000 dependents.

By contrast, the Department of Health and Human Services estimates that expanded dependent coverage to age 26 under national health reform will make health insurance available to 1.2 million more young adults.

Most of these families are under large group plans. HHS estimates that adding these children has bumped premium costs by an average of 0.7 percent, assuming the costs are spread across all plan participants. That means an increase in premiums of roughly $62 to $149 a year.

Congress didn't have that option of spreading the cost of expanded coverage across the entire military community, in part because parents who are active duty members pay nothing for their health care and no one wanted to see that changed.

Even HHS officials concede that expanding dependent coverage carries significant costs for some civilian families, a relatively small number who are under "non-group" health insurance policies. HHS said enrolling these children — 75,000 in 2011 — will raise their annual premiums an average of $2,360 in 2011 and by $2,400 in 2012.

"To a large extent, premiums in the non-group market are individually underwritten, and…most of the premium cost will be borne by the parents who are purchasing the policy to which their child is added," HHS officials explained. That situation echoes what military families will face.

Some military associations have blasted the premiums expected under the TYA program. Proponents on Capitol Hill argue TYA still will be more affordable than many commercial health insurance plans for young adults and TRICARE will provide more comprehensive coverage.

TYA coverage, at least initially, will be limited to TRICARE Standard or Extra. Standard is the military's fee-for-service option. It has no enrollment fee but families pay a deductible and face cost shares on treatment costs. But they can choose their doctor from an authorized list. TRICARE Extra offers discounts for narrowing doctor choices to the TRICARE network.

TRICARE Prime is the managed care option. It will be available under TYA at some later time, officials said.

To qualify for TYA, young adults can't be married or have access to employer-sponsored health coverage. Applications will be submitted to their regional TRICARE contractor. They must agree to pay monthly premiums by credit card or electronic fund transfer from a checking or savings account.

When final regulations are published, dependents who want coverage back to Jan. 1 merely will have to pay back premiums and file retroactive claims. In the interim, they should use only TRICARE-authorized providers and save their medical receipts.